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1. Which of the following statements comparing the weighted-average method with the FIFO method of accounting for cost flows is incorrect? a) Using the FIFO method, the equivalent units are calculated differently from the weighted-average method because the equivalent work done on the opening work-in-progress last period is excluded from the computation. b) The weighted-average method averages the costs associated with the work done in the previous period with the costs incurred in the current period. c) The fact that there are two different methods suggests that it is not possible to state which method provides more accurate results. d) When there are no beginning inventories or ending inventories, both methods will provide identical results. a 2. Which of the following statements about a process costing system is incorrect? a) In process costing system, there is a work-in-progress account for each processing department. b) In a process costing system, equivalent units are separately computed for materials and for conversion costs. c) In a process costing system, overhead can be under- or overapplied, just as in job-order costing. d) In a process costing system, materials costs are traced to units of products. 3. In which production setting is operation costing most appropriate? a) Custom automobile repair shop b) Landscaping business c) Oil refinery d) Clothing manufacturer 4. Colby Company has a process costing system in which the weighted-average method is used. The company adds all materials at the beginning of the process in the moulding department, which is the first of two stages of its production process. Information concerning the materials used in the moulding department during March is as follows: Materials costs Units 22,000 90,000 15,480 46,120 Work in progress at March 1 Units started during March Units completed and transferred to next department during March 100,000 What was the materials cost of the work-in-progress inventory at March 31? a) 1,100 b) 5,500 c) 6,600 d) 12,100 5. Merckley Company has a process costing system and uses the FIFO method. For May, the company's beginning work-in-progress inventory was 80% complete with respect to conversion, and the ending inventory was 50% complete with respect to conversion. Information on units processed and conversion costs incurred during May follow: Conversion Units cost Work-in-progress inventory on May 1 25,000 22,000 Units started into production, and costs incurred during the month 135,000 161,000 Units completed and transferred to finished goods during the month 110,000 Work-in-progress inventory on May 31 50,000 What was the amount of conversion cost in the ending work-in-progress inventory? a) 28,750 b) 35,000 c) 57,500 d) 70,000

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